By Janell Byrd Chichester

Many people are struggling to pay their mortgage, rent, or utility bills because of the COVID-19 pandemic. While government relief options are being quickly adopted and revised, relief measures do not always offer the protections that many Americans assume they do. They often come with strings attached or work in unanticipated ways. For example, while pandemic-related moratoriums on foreclosures and evictions or payment suspension may allow you to stay in your home during the relief period, they typically will not relieve you of the underlying obligation to pay your mortgage or rent. Also, be aware of scams and programs with predatory pricing, which can be rampant during a crisis.  Being proactive can make all the difference when facing hardship, and it starts with reading the fine print.

On March 27, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a stimulus aid package that provides some relief for homeowners and renters who are affected by the coronavirus pandemic. Homeowners with federally-backed mortgages (loans owned by the Department of Housing and Urban Development (“HUD”), the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), or the Veterans Administration) have multiple options for mortgage relief. The CARES Act prohibits lenders and servicers of federally-backed mortgages from foreclosing on homeowners for 60 days after March 18. In addition, the law allows homeowners with federally-backed mortgages to request a forbearance on payments for up to a year if they are experiencing financial hardship because of the pandemic. You can visit the HUD, Fannie Mae, Freddie Mac, or the Veterans Administration websites for more information on available relief.

Janell Byrd Chichester is the director of the Thurgood Marshall Institute at the NAACP Legal Defense Fund. (Courtesy Photo)

Even if you do not have a federally-backed mortgage, you should reach out to your lender to see what relief options may be available. Notably, mortgage relief options are not automatic and homeowners must contact their lenders to request a forbearance. Therefore, if you are experiencing financial hardship because of the COVID-19 pandemic and are concerned you may not make your mortgage payments, you must proactively take steps to enroll in programs that reduce or suspend payments and protect your credit. Typically, you can testify over the phone that you are experiencing pandemic-related hardship, and your lender will take immediate action to help address this matter. 

Importantly, these relief programs are not considered loan forgiveness. Eventually, you will have to pay your lender any outstanding balance from a payment reduction or forbearance period, though they will likely work out a payment plan with you that is financially realistic. Make sure your lender is waiving fees and penalties as part of your forbearance agreement. Though, if you are able to continue paying your mortgage, you should. Forbearance programs should be a last resort, as they make future delinquency more likely as you try to catch up on back payments. They may also extend your loan’s duration and increase your total interest payments.

There are also relief options available for renters during the COVID-19 pandemic. Nearly a third of U.S. renters did not pay their April rent. If you are expecting an imminent eviction or struggling to make your forthcoming rental payment, you should check to see what your state, city, or county is doing to provide relief for renters. For example, some states have banned or are considering banning evictions of tenants who are facing COVID-19-induced economic hardships. Many other localities are enacting similar measures. Some renters are also protected from eviction during the pandemic by the CARES Act. Though, only certain properties are covered by the Act: properties with a federally-backed mortgage, public housing, properties covered by the Section 8 Housing Choice Voucher program, and others. If you live in one of these properties, you cannot be served with an eviction notice until July 25, and the notice must give you 30 days to vacate. During the moratorium, you cannot incur late fees, penalties, or other charges for late rental payments. However, your landlord can still proceed with an eviction for a reason outside of  nonpayment of rent, or with an eviction that was initiated prior to the law’s passage. 

Again, if your income has not been affected by the pandemic, it is important to continue to pay your rent. Skipping payments now, if you don’t need to, can increase your risk of delinquency and eviction later as you try to make up for back payments.

Finally, it is imperative understand how the economic challenges stemming from COVID-19 are impacting Black people and other people of color. Black communities are especially vulnerable to housing insecurity and further loss of wealth during the pandemic given the disproportionate losses they experienced in the 2008 financial crisis. While the CARES Act is positive step forward, the Trump Administration has nonetheless repeatedly moved to curtail critical civil rights protections. For example, HUD recently proposed rolling back a fair housing rule that was enacted to combat structural inequalities stemming from decades of discriminatory and segregative housing practices. This proposed rollback, combined with higher loan denial and failure rates and other obstacles Black communities and communities of color face, make homeownership more difficult to attain. 

The NAACP Legal Defense and Educational Fund, Inc. (LDF), which has defended Black homeowners and renters against unfair and unconstitutional schemes for the past 80 years, recently, called on state and local governments to address the economic challenges Americans are facing amidst the COVID-19 pandemic. Moreover, LDF’s think tank, the Thurgood Marshall Institute (TMI), is releasing a brief and a report that focus on pandemic-related foreclosures, evictions, and utility shutoffs. Both contain important links for homeowners and renters seeking assistance. The brief, Foreclosures, Evictions & Utility Cutoffs: Relief for People Facing Hardship During the Pandemic, is available now on TMI’s website. The report will be released later this month. LDF and TMI are valuable resources for information you may need as the pandemic continues to unfold. If you are a renter or homeowner struggling to make payments, I urge you to take action now. 

Janell Byrd Chichester is the director of the Thurgood Marshall Institute at the NAACP Legal Defense Fund.

The opinions on this page are those of the writers and not necessarily those of the AFRO.
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